Fund managers' exposure in banking stocks rose to a six-month high of over Rs 34,000 crore in December on account of rise in equity market and various steps taken by the RBI to prop the banking sector.

According to the latest data available with market regulator Sebi, mutual fund investments in banking stocks in December 2013 reached Rs 34,153 crore, accounting for 17.66 per cent of their total equity assets under management (AUM) of Rs 1.93 lakh crore.

This was the highest level since June 2013, when fund managers had shored up their investment in banking stocks to Rs 35,442 crore.

In November 2013, mutual fund's exposure in banking stocks was at Rs 32,417 crore.

Market participants said MFs have shown interest in banking stocks during the September-December period, primarily on account of measures announced by the RBI coupled with overall surge in the stock market.

In September, new RBI Governor Raghuram Rajan took steps to stabilise the rupee and also announced various measures to liberalise the banking system, including higher overseas borrowing limits for lenders and simpler processes for opening branches.